Bitcoin, in spite of its ephemeral virtual currency status, could leave behind a serious energy footprint.
Bloomberg reports that the “global power needed to create cryptocurrencies this year could rival the entire electricity consumption of Argentina and be a growth driver for renewable energy producers from the U.S. to China. Bitcoins are “mined” via machines that require hefty amounts of electricity.
Morgan Stanley analysts found that miners of bitcoin and other cryptocurrencies could require as much as 140 terawatt-hours of electricity in 2018, comprising around 0.6 percent of the global total. For a point of reference, Bloomberg noted that’s more than the expected power demand from electric vehicles in 2025. According to the Morgan Stanley report, each Bitcoin costs around $3,000-$7,000 to mine, a figure that includes the cost of the electricity and the machine itself.
Nicholas Ashworth, who led the team of analysts, wrote that, “If cryptocurrencies continue to appreciate we expect global mining power consumption to increase.” The number is too small to be considered a major growth factory of global utility shares, but it could be a positive thing for companies investing in solar and wind power, as well as energy storage.
Read the full report here.